How to Refinance Investment Properties

Investment properties are a great way to diversify your income sources by adding passive income. Refinancing such a property can afford a homeowner a number of benefits. However, requirements for refinancing an investment property mortgage can be more stringent due to increased risk.

If you are interested in refinancing an investment property, here are some things you should know before starting the process. 

Why Refinance Investment Properties?

There are a few reasons why you might want to refinance your investment property: 

A little more room in the budget 

A refinance replaces your current mortgage with a lower rate, which, in turn, will lower your payment, thus providing you with better cash flow. 

Pay off an adjustable rate or a balloon note with a fixed rate 

This will give you peace of mind that your payment will remain consistent and you won’t need to scramble to pay off the entire loan early.

Buy additional investment properties 

You can use the equity in your investment property by obtaining a “cash out” mortgage to reinvest in other properties, strengthening your portfolio as a property investor. 

What to Do Before Refinancing an Investment Property

Here is a short checklist of what you should review and consider before moving forward with an investment property refinance:

Check your investment property’s current value

as there might be a loan-to-value requirement. Keep in mind, you may need a certain amount of equity to even be considered for a refinance.

Prepare all relevant documentation

such as tax returns, bank statements, and any other items you will need to qualify for a loan. 

Make sure an investment property refinance is a viable move. 

Interest rates on investment properties are higher by default, so it is important to work with a knowledgeable mortgage professional to determine whether such a move is advantageous.

Explore Investment Property Refinancing With Butler Mortgage

Whether you have one investment property or many, a mortgage professional can help you navigate the refinance process and secure desirable rates that fit your budgetary needs. For over 25 years, Butler Mortgage has worked with both first-time and seasoned buyers wanting to own or refinance a home in Central Florida. Let us help you find the right investment property loan solution for you by calling 407-931-3800 or by filling out our free consultation form online.